Posting groups in Dynamics NAV

In Microsoft Dynamics NAV (Navision) posting groups make the connection between accounting module and operational modules (sales, purchase, inventory, manufacturing, service etc.). Through posting groups, when one post a transaction the amounts are recorded in General Ledger and the user does not have to know the G/L Accounts involved in the transaction.

Posting groups are a key concept for Dynamics NAV, the proper implementation of the system depends on their understanding and setup. There are three kinds of posting groups:

General Posting Groups

Specific Posting Groups

VAT Posting Groups

General Posting Groups

General posting groups are used to define revenues and expenses accounts related to transactions -class accounts 6 and 7.

General posting groups are divided into:

General Business Posting Groups

General Product Posting Groups

General Business Posting Groups – specifies what kind of partners are we making deals with, that means customers and vendors. This posting groups are assigned on the card of each customer and vendor. General business posting groups definition is made according to various criteria – geographical area, type of business and industry. They results from the business analysis before the implementation and are established together by the implementer with the customer. On the picture bellow you can see posting groups defined by the geographical criteria.

General Product Posting Groups – specifies what elements are we dealing; merchandise, raw materials, services etc. In the system, they are associated on the cards of the item, resource, general ledger account or machine center and are specific for each company.

General posting groups setup

The association between posting groups and general ledger accounts is made in a matrix window where, for each combination between a General Business Posting Grup and General Product Posting Group expenses and income accounts are entered. This setup makes more than automatic recording of the transactions in the general ledger, it allows the enforcing of business rules by establishing compatibilities between partner types (business groups) and product types (product groups). In other words, if one tries to record a transaction which has not the required posting group setup, Dynamics NAV will generate an error and the transaction will not be allowed.

Specific posting groups

Specific posting groups make the mapping between Dynamics NAV entities for whom there is analytical tracking and the balance sheet accounts related to them. We have specific posting groups for:

Customer

Vendors

Items

Fixed Assets

Bank Accounts

By using specific posting groups we have the benefit of keeping a ”cleaner” Chart of Accounts, whitout many analytic accounts, due to the fact that analytical tracking is made in the operational module. More than that, these posting groups can be used for analysis, all the standard Dynamics NAV reports allow filtering by posting groups.

VAT Posting Groups

In the same manner as general posting groups, VAT posting groups are divided in :

VAT Business Posting Groups – assigned to partners

VAT Product Posting Groups – assigned to the transacted elements

As general posting groups, VAT posting groups’ setup is made in a matrix window where for each combination of VAT Business Posting Group and VAT Product Posting Group are established: VAT general ledger accounts for purchase and sales, VAT calculation type, VAT percent, on what VAT journal column will appear etc.

This setup provides flexibility for changes and new situations regarding VAT recording and reporting.

Conclusion

Posting groups allow Dynamics NAV to adapt to various business scenarios and the Chart of Accounts does not have to be loaded with many analytical accounts. If the groups’ setup is made according with the company’s needs, the potential for tracking and reporting is greatly enhanced. Moreover, through a correct setup you can be sure that in the system will be recorded only the transactions allowed by your company’ s business rules.